Matt Taibbi Discusses Book With C-SPAN's Brian Lamb

Matt Taibbi, a longtime contributor of snarky articles in Rolling Stone on the outrageous behavior of "too big to fail" financial institutions backed by the federal government, appeared on C-SPAN's Q&A recently to discuss his new book, The Divide: American Injustice in the Age of the Wealth Gap, with C-SPAN founder Brian Lamb.

The major theme of the book, one that has been pursued several times at congressional hearings by Sen. Elizabeth Warren, D-Mass., is that whereas CEOs of too big to fail banks have allegedly committed serial financial crimes, costing trillions of dollars for which their companies have settled for billions paid for by stockholders, none of them has ever gone to jail, whereas America's prisons are full of low-class people who have been jailed for years for mere possession of a small quantity of drugs.

Lamb played two pertinent video clips. In one, a recent interview with Securities and Exchange Commission (SEC) Chair Mary Jo White responds unconvincingly to a question by Lamb as to why there has been almost no jail time for any of the managers of huge firms that were allowed to settle charges resulting in billions of dollars in fines. (By the way, it should be noted that the SEC lacks criminal enforcement authority, although it can refer cases to the Justice Department, where Attorney General Eric Holder has given a virtual free pass to the largest financial institutions on the ground that prosecution of executives of large financial institutions could damage the economy.)

In the other clip, then-Rep. Henry Waxman, D-Calif., tried to elicit some meaningful reaction from former Lehman Brothers CEO Richard Fuld, who had walked away with chunks of $60 million and $250 million after the firm's failure helped to touch off the 2008 episode of the financial crisis, which Taibbi estimated entailed a cost of $7 trillion to fill up the hole. Taibbi observed that Fuld acted as though this is totally natural.

When Lamb pressed Taibbi for more thoughts as to what lies behind this behavior, Taibbi blamed the financial press for catering to the financial bosses, citing JPMorgan Chase CEO Jamie Dimon as one who is especially lionized by financial reporters, having settled on case for $13 billion, part of $20 billion in settlements of charges that included manipulating energy prices in California and Washington state, lying about the trading loss of the "London whale" and serving Bernie Madoff for years without seeming to notice that no actual trades were taking place.

Taibbi characterized Dimon's demeanor at congressional hearings on the London whale caper as one of "boredom." (I wrote at the time that many of the legislators competed to fawn over Dimon, offer statements of support and seek his advice on issues before Congress.) Taibbi pointed out that in the fallout from the whale and other incidents, 7,500 lower-level employees were laid off, but the senior executives got raises. He added that there is a cultural difference between the United States and United Kingdom, where after Barclay's was found to have manipulated the calculation of LIBOR interest rates, its CEO, coincidently named Diamond, was forced out of his job.

Taibbi credited his father, Mike, a career journalist who was shown reporting from the O.J. Simpson trial, with instilling in him the values of old fashioned reporting. Taibbi lamented that the culture has changed to the point where reporters see themselves as part of the "in" group and prize access to CEOs like Dimon.

Taibbi has embarked on a new venture to provide content for microsites on First Look Media.

Matt Taibbi, a longtime contributor of snarky articles in Rolling Stone on the outrageous behavior of "too big to fail" financial institutions, appeared on C-SPAN's Q&A recently to discuss his new book, The Divide: American Injustice in the Age of the Wealth Gap, with C-SPAN founder Brian Lamb.